Whetstone sells national line, keeps core business

PETER GUINTAStaff Writer

Published Wednesday, September 15, 2004

Whetstone Chocolates said Tuesday that it will absorb some of its retail and office employees among the 41 people who will lose their jobs after its national production line closes permanently in December.

Virginia Whetstone, company president, said her family will continue to operate as a manufacturer and retailer in St. Augustine.

"I have no intention of getting out of the chocolate business," she said. "We'll continue to operate as Whetstone Chocolates. But we won't be able to absorb all those people. Some are long-term employees. That's the difficult thing."

The company operates a candy factory and three retail stores in St. Augustine and the sale of the national production line involves a complicated stock transfer by Virginia and Hank Whetstone, daughter and son of company founder Henry Whetstone.

In the deal, the two Whetstones sold all their stock in SweetWorks, a company formed in 2002 with the merger of Oakleaf Confections of Toronto, Niagara Chocolates of Buffalo, N.Y., and Whetstone Candy Company, based in St. Augustine.

The three companies manufactured candy and chocolate products for sale nationally. Control of SweetWorks was acquired by Philip Terranova, of Buffalo, N.Y., who is a part owner of Niagara Chocolates and who is now president of SweetWorks.

SweetWorks manufactures chocolate products for distribution to large retail outlets such as Walgreen's Drug Stores and Kroger Foods, among other chains, Virginia Whetstone said. It will continue to make chocolate products made famous by Whetstone Chocolates, such as the Break-A-Part Orange and SeaShells.

In a prepared statement, Terranova said he saw this as an "exciting opportunity" for the continued growth of SweetWorks.

"The growth of our business and synergies of the proximity of the Oak Leaf Toronto facility and Niagara Buffalo facility have afforded us the opportunity to increase efficiencies of both manufacturing and distribution," Terranova said. "There will be no interruption in manufacturing, product availability or service during the transition."

Terranova did not return phone calls Tuesday requesting comment about his acquisition.

Under the terms of the agreement, rights to the Whetstone brand name remain with the family, but SweetWorks will be permitted to sell products under the Whetstone name for two years.

Whetstone Chocolates was founded in 1967 by Henry and Esther Whetstone of St. Augustine. Virginia Whetstone said her father invented many of the production machines used to manufacture candy at the factory off State Road 312, such as the machine which mixed chocolate and nuts into their nut cluster product. The elder Whetstone has since sold that patent, she said.

Her brother also developed machines used on the production line and holds U.S. and foreign patents for designs involving chocolate and toy combinations, she said.

Hank Whetstone said, "The chocolate and toy combination products represent an enormous opportunity and we intend to develop this area with partners in the industry."